Ukraine's central bank raises key policy rate for the first time in two years. What's behind it?

On Thursday, December 12, the National Bank of Ukraine's board decided to raise the key policy rate by 0.5 percentage points to 13.5% per annum. There had been hints about the possibility of such a decision, but to some extent it came as a surprise.

Back in October, the vast majority of members of the National Bank's Monetary Policy Committee expected the key policy rate to remain at 13% in the coming months. However, they did not rule out the possibility of raising it earlier.